Fixed contribution towards age-based premiums violates ADEA?

[Flyboyjohn]

In the new world of age-based rates for each individual covered by a small group plan does anyone disagree with the proposition that the employer violates ADEA if it says "I'll pay $XXX/month towards your premium and you pay the balance" (a so-called defined contribution approach)?

I know that ADEA permits the employer to pay a percentage of the age-based premium, it just prohibits the employer from paying a fixed amount.

Thanks

[Peter Gulia]

An executive agency's interpretation (mostly from 1979) of the statute is here:

http://www.gpo.gov/fdsys/pkg/CFR-2013-title29-vol4/pdf/CFR-2013-title29-vol4-sec1625-10.pdf

If the group health plan uses regulated health insurance contracts (rather than an employer's unfunded payments or a VEBA), isn't it good enough that the employer's actual payment is equal for every employee?

[Flyboyjohn]

Don't think so, see the statement in 1625.10(d)(4)(ii)©on contributory plans:

"The required contribution of participants may increase with age so long as the PROPORTION of the total premium required to be paid by the participants does not increase with age."

If the employer's contribution amount is fixed the proportion of the increasing premium that the employee pays increases with age which is prohibited.

[Peter Gulia]

But does paragraph (a)(1) make it unnecessary to use (d)(4)?

[Flyboyjohn]

Not in my humble opinion (the specific trumps the general) but I respect your right to reach a different conclusion.

[Peter Gulia]

I haven't reached any conclusion. Rather, I've enjoyed the opportunity to learn from you.

[jpod]

If the employee population is small enough Federal ADEA doesn't apply to the employer. There may be a State ADEA law to consider, however, that does not have a minimum size threshold.

[Flyboyjohn]

Good point, I think Federal ADEA kicks in at 20 employees